Winchester Energy reveals development strategy for Mustang following White Hat well success

Winchester Energy (ASX: WEL) has revealed it plans to drill 34 wells across the Mustang area at its Permian Basin acreage in Texas as part of a new development strategy.

The new development strategy follows the success of White Hat 20#3 which initially flowed 306 barrels of oil per day and continues in line with expectations.

Modest gas flows from White Hat 20#3 have also been observed and Winchester has started work to connect the well to gas sales.

Meanwhile, under the new development strategy, nine wells will be drilled in the central Mustang area, with 25 to then be drilled across Mustang north and south areas.

Additionally, Winchester has incorporated new data from White Hat 20#3 to update the gross prospective resources of the Strawn Sand Fry within Mustang, which is part of Winchester’s wider White Hat Ranch acreage.

Gross prospective resources within Mustang’s Strawn Sand now have a P50 best estimate of 2.029 million barrels of oil equivalent with a P10 high estimate of 3.773MMboe and a P90 low estimate of 1.078MMboe.

White Hat 20#4

Earlier this month, Winchester reported it had started permitting for the next Mustang well White Hat 20#4, which is scheduled for spudding next month.

The company will have a 75% interest in White Hat 20#4, with private Texas partner Carl E Gungoll Exploration to participate at a 25% working interest.

The well is designed as an immediate step-out from White Hat 20#3 and will be located 420m to the south-west.

White Hat 20#3 itself was a step out from White Hat 20#2, which has been producing for two years.

Winchester anticipates it will be a low-risk well and is targeting the Fry Sand within the Strawn Formation.

According to Winchester, the well will effectively “twin” the Jack Frost-3 well that was drilled in 1965 and recovered oil and gas cut mud on a drill stem test.

If successful, it is expected the new well will boost the company’s net oil production from its acreage.

In readiness for continuation of development drilling after White Hat 20#4, Winchester has already begun permitting for White Hat 20#5 with plans to spud that well shortly after it has finished drilling and bringing onto production White Hat 20#4.

Prior to market open, Winchester’s share price was at $0.026.